Legal Opinion On Corporate Liability: Negligence And Duty Of Care

You are a newly graduated lawyer and have just gained a position at the law firm of Ejusdem & Generis. You were hired due to your outstanding article on corporate liability of wild animals based on the case of Shorten v Grafton District Golf course NSWCA 58. Your employer has just asked you to prepare

A legal opinion for one of the firm’s clients, Susan. A legal opinion is an essay based on the IRAC structure. It does not prosecute a position for one person. It is an evaluation of the merits of a case, based on balancing the law as it is applicable to both parties.

Whether Cliff and Mary have the right to make a claim for negligence against Susan for the injury sustained by them in relation to their property

The tort of negligence essentially has three elements which have to be attained for the purpose for establishing it before law. Negligence is the action by which a person injures another person unintentionally by failing to take reasonable care. There three primary factors to be considered when analyzing a successful claim of negligence include, a duty of care, breach of duty of care and causation of injury because of the breach of duty of care. The case of Australian Knitting Mills, Ld. v. Grant [1933] 50 C. L. R. 387 had discussed the provisions of negligence in Australia followed by the case famous English case Donoghue v. Stevenson [1932] AC 562. In both the cases it was stated by the court that a reasonably foreseeable injury will give rise to a duty of care. Reasonable foreseeable injury is determined objectively. This means that it is not the defendant who has to reasonably foresee the injury, but a prudent person who has substituted the defendant in the similar position. There are various factor which the prudent person would take into consideration to foreseen the injury. These factors include closeness and proximity to the injured person with the defendant. In addition it needs to be noted that the plaintiff being injured is not a point of determination, whether any person in the position of the plaintiff would suffer injury has to be identified. 

In line with the Perre v Apand (1999) 198 CLR 180 case, the factors which needs to be taken into consideration for the determination of the duty of care include factors proximity and extent of closeness between the plaintiff and the defendant, precedent cases where there was a duty identified, the ability of the person to control the injury and any legal policy which asks to impose a duty.

In connection to the case of Ultramares Corp v Touche, Niven & Co 174 NE 441 (1931), the judges had made a ruling that duty of care would not be present in situation where it leads to a liability in an amount, time and class which cannot be determined. The ruling made by the judges imply that although in theory a duty of care may be identified, if such duty leads to indeterminate factors it would be denied by the courts.

Duty of Care Analysis

The factor which requires analysis subsequent to duty identification is that of a “breach of duty”. The tests which are deployed to analyze the breach include seriousness and likelihood of injury, precaution taking burden and activity’s social utility.

The test deployed to analyze the breach is termed as the “objective test”. A prudent person substitutes the defendant for the analysis of whether the care taken is reasonable. The test was applied in the case of Blake v Galloway [2004] 3 All ER 315.

The provisions of seriousness had been discussed in Paris v. Stepney Borough Council [1951] AC 367 by the Australian HC. In line with this case the rule which had been determined states that duty of care is present even the breach of duty can cause serious harm and reasonable care has not been taken. 

The provision of likelihood of injury was dealt adequately by the case of Bolton v. Stone [1951] AC 850. In line with this case it can be stated that the duty would be breached if the probability of injury in case of failure to take reasonable care is high. Conversely, if the probability is so low that a reasonable person will disregard the risk, a failure would not lead to the breach of duty.

In line with the case of Latimer v. AEC Ltd [1953] AC 643 the rules for burden of taken precautions had been discussed. The court made it clear that the law imposes a duty on a person to take “reasonable precautions” if reasonable precaution are take, and an injury is caused, there would be no negligence.

The final element is causation of harm or injury. The primary test for the analysis of the satisfaction of this element is termed as the “but for” test. This interesting test provides that a person having a duty of care and breaching such duty would still not be liable for negligence if the injury to which the plaintiff is subjected would have been incurred irrespective of the breach of duty. In Barnett v Chelsea & Kensington Hospital [1969] 1 QB 428 the court held that a doctor who breached his duty of care was not negligent as the patient would have died even if the duty was not breached.  The provisions of this test had also been used in the case of Cork v Kirby Maclean [1952] 2 ALL ER 402, where it was clarified that if the harm would not be there if a particular action was not present, then the action would be the real cause of the injury.

Application

Further, in line with the case of Overseas Tankship (UK) Ltd v Morts Dock & Engineering Co Ltd [1961] AC 388, it can be clarified that the element of causation would not be satisfied if, the damages or harm which have been are “too remote”. This means that even if the breach of duty has lead to the causation, a reasonable person should be able to foresee the injury and not term it is too remote for the element of causation to be established.

There a various forms of injury which a person may be subjected to in case of negligence. These include Physical or property injury, mental injury and purely economic injury.  If it has been provided before the court that all three elements of negligence have been identified, the court would move towards the assessment of damages. Damages may also include any form of legal fees incurred by the plaintiff. These provisions had been clarified by the court in line with the case of Uren v John Fairfax and Sons Pty Ltd [1966] HCA 40. 

Duty of care analysis

Benji is a royal Bengal tiger and Susan is its owner. Benji is used for the purpose of a magic show and Susan does not consider him to be a threat to the society because of his docile nature. However, because of the fearful nature of human being she lives in a remote area with Benji. According to the principles of vicarious liability if any damage is caused by Benji, Susan would be liable as she is the owner. When the cases of Australian Knitting Mills, Ld. v. Grant and Donoghue v. Stevenson are applied in this situation it can be stated that a reasonably foreseeable injury will give rise to a duty of care. Reasonable foreseeable injury is determined objectively. This means that it is not the defendant who has to reasonably foresee the injury, but a prudent person who has substituted the defendant in the similar position. Thus it is not the thinking of the defendant, which matters for the court and in the same way what Susan thinks about Benji causing injury is not the matter rather the perspective of a reasonable person would matter to the court. A reasonable person would be a evident perspective that Benji being a tiger can injury any person in proximity. In addition the application of Perre v Apand signifies that factors which need to be taken into consideration for the determination of the duty of care include factors proximity and extent of closeness between the plaintiff and the defendant. In the present case Cliff and Mary being the neighbours are in close proximity to Benji. In addition the defence provided through Ultramares Corp v Touche, Niven & Co would not be applicable as the liability in an amount, time and class is not indeterminate. Therefore the analysis concludes that Susan owes a duty of care to Cliff and Marry.

Breach of duty of care analysis

In this section, for the purpose of analysis of duty of care breach, the objective test would be used.  

The factor which requires analysis subsequent to duty identification is that of a “breach of duty”. The tests which are deployed to analyze the breach include seriousness and likelihood of injury, precaution taking burden and activity’s social utility.  The breach of the duty also as per Blake v Galloway will be analyzed in an objective manner. Thus what Susan thinks about reasonable care is not the matter to the court rather the perspective of a reasonable person would matter to the court. The perspective of a reasonable person can be analyzed by deploying the case of Bolton v. Stone with respect to the likelihood of the injury. In the case it has been stated that the duty would be breached if the probability of injury in case of failure to take reasonable care is high. Conversely, if the probability is so low that a reasonable person will disregard the risk, a failure would not lead to the breach of duty. Thus it would be very likely for a reasonable person to foresee that if reasonable care is not taken in relation to Benji it is very likely to cause injury. In addition as per Paris v. Stepney Borough Council it can be stated that a reasonable person would foresee serious injury caused to other by Benji. Further a reasonable person in Susan’s circumstances would not have left the keys at home or at a easily accessible place known that kids like Kim who play with Benji know where they Keys are kept. She has take all reasonable care in securing the compound of Benji but she has breached the duty by keeping the Keys home when she was out where it could be accessed easily. Thus in the present situation it can be stated that the duty of care is breached by Susan as a reasonable person with respect to the burden, likelihood and seriousness would have not kept he keys home as per the case of Latimer v. AEC Ltd. 

Causation analysis

Significant damages have been sustained by Cliff and Mary because of Benji’s actions. These damages include, Damage by fire to their house, damage for loss of chickens, damages to the tractor and mental damages because of shock caused by the tiger attack. The “but for” test has to be applied to identify causation element of negligence. According to the test a person having a duty of care and breaching such duty would still not be liable for negligence if the injury to which the plaintiff is subjected would have been incurred irrespective of the breach of duty. Further, according to the case of Cork v Kirby Maclean if the harm would not be there if a particular action was not present, then the action would be the real cause of the injury.  Thus, here no damages would have been caused to Cliff and Mary if Benji had not jumped on the tractor and the element of causation is identified as it is the only cause leading to the damages. However according to the application of the “remoteness test” of Overseas Tankship (UK) Ltd v Morts Dock & Engineering Co Ltd it can be stated that the damages caused with respect to the Chicken and the fire to the house are too remote to foresee. A reasonable person would not foresee Benji Causing fire or the presence of Chickens. Thus, according to the analysis Cliff and Mary can claim mental damages and damages to the tractor from Susan because of her negligence.

Damages analysis

Cliff and Mary have suffered both damages to their property as well as mental injury because of the tiger attack. The application of the case of Uren v John Fairfax and Sons Pty Ltd entitles them to claim both such damages.

Conclusion

Thus, as the three elements of negligence are clearly present in the case facts, it is evident that Susan has to compensate Cliff and Mary for mental injury and the tractor 

References

Australian Knitting Mills, Ld. v. Grant [1933] 50 C. L. R. 387

Barnett v Chelsea & Kensington Hospital [1969] 1 QB 428

Blake v Galloway [2004] 3 All ER 315

Bolton v. Stone [1951] AC 850

Cork v Kirby Maclean [1952] 2 ALL ER 402

Donoghue v. Stevenson [1932] All ER 1

Latimer v. AEC Ltd [1953] AC 643

Overseas Tankship (UK) Ltd v Morts Dock & Engineering Co Ltd [1961] AC 388

Paris v. Stepney Borough Council [1951] AC 367

Perre v Apand (1999) 198 CLR 180

Ultramares Corp v Touche, Niven & Co 174 NE 441 (1931)

Uren v John Fairfax and Sons Pty Ltd [1966] HCA 40